Advanced Search
MyIDEAS: Login to save this paper or follow this series

Impact of ASEAN-India FTA on India's plantation commodities: A Simulation analysis

Contents:

Author Info

  • C. Veeramani

    ()
    (Indira Gandhi Institute of Development Research)

  • Gordhan K. Saini

    (Indira Gandhi Institute of Development Research)

Abstract

The present study attempts a quantitative assessment of the impact of recently signed ASEAN-India FTA (AIFTA) for selected plantation commodities (coffee, tea and pepper) in India. We use partial equilibrium modeling approach (SMART model and gravity model) to simulate the likely import increase of the plantation commodities under the proposed tariff reduction schedule of the AIFTA. Overall, the results suggest that the AIFTA will cause significant increase in India's import of plantation commodities. The increase in imports is mostly driven by trade creation rather than trade diversion. From the economic efficiency point of view, trade creation improves welfare as the new imports replace the high-cost domestic production. The analysis shows that the proposed tariff reduction may lead to significant tariff revenue loss to the government. However, the gain in consumer surplus (due to the fall in domestic price and the consequent reduction in dead-weight loss) outweighs the loss in tariff revenue leading to net welfare gain. By and large, the simulations based on the SMART and gravity models provide similar results on the magnitude of total increase in imports. The surge of new imports may have adverse impact for the livelihood of the Indian farmers engaged in the production of these commodities. Farmers will have to realign the structure of production according to the changing price signals and hence it is critical to provide adjustment assistance to the affected farmers.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.igidr.ac.in/pdf/publication/WP-2010-004.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2010-04.

as in new window
Length: 22 pages
Date of creation:
Date of revision:
Handle: RePEc:ind:igiwpp:2010-04

Contact details of provider:
Postal: Gen. A. K. Vaidya Marg, Goregaon (E), Mumbai 400065
Phone: (022) 840 0919/20/21
Fax: (022) 840 2752/2026
Email:
Web page: http://www.igidr.ac.in
More information through EDIRC

Related research

Keywords: SMART Model; Gravity Model; Simulation Analysis;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Barry Eichengreen & Douglas A. Irwin, 1998. "The Role of History in Bilateral Trade Flows," NBER Chapters, in: The Regionalization of the World Economy, pages 33-62 National Bureau of Economic Research, Inc.
  2. Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2004. "Import Demand Elasticities and Trade Distortions," CEPR Discussion Papers 4669, C.E.P.R. Discussion Papers.
  3. Fidrmuc, Jan & Fidrmuc, Jarko, 2000. "Disintegration and Trade," CEPR Discussion Papers 2641, C.E.P.R. Discussion Papers.
  4. James Harrigan, 2001. "Specialization and the volume of trade: do the data obey the laws?," Staff Reports 140, Federal Reserve Bank of New York.
  5. Edward E. Leamer & James Levinsohn, 1994. "International Trade Theory: The Evidence," NBER Working Papers 4940, National Bureau of Economic Research, Inc.
  6. Sawkut Rojid, 2006. "COMESA trade potential: a gravity approach," Applied Economics Letters, Taylor & Francis Journals, vol. 13(14), pages 947-951.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ind:igiwpp:2010-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamprasad M. Pujar).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.